TO: ALL INSURERS LICENSED. TO WRITE ACCIDENT, AND HEALTH INSURANCE IN NEW YORK STATE

SUBJECT: CHAPTER 501 OF THE LAWS OF 1992 -- EFFECTIVE DATE PROVISIONS FOR COMMUNITY RATING AND OPEN ENROLLMENT

Chapter 501 of the Laws of 1992 was signed into law on July 17, 1992. This legislation makes comprehensive
changes in the marketing, underwriting, rating and contract structure of individual and small
group medical, hospital and surgical coverage, including Medicare supplement insurance, in the
State of New York.

Section 21 of this legislation contains the effective date provisions of Chapter 501. Certain
of these provisions require insurers to modify their usual procedures regarding renewal rating
periods for new policies and contracts delivered in this state and new coverages effectuated
in this state on or after July 17, 1992. Specifically, rating periods for policies issued on
or after July 17, 1992, but before March 31, 1993. must terminate on March 31, 1993, and such
policies must be community rated as of April 1, 1993.

Similar renewal rating period modifications may be necessary for: (a) existing policies and contracts
delivered in this state and existing coverage effectuated in this state on or after April 1,
1992 but before July 17, 1992, (b) existing policies and contracts delivered in this state and
existing coverage effectuated in this state before April 1, 1992 and (c) policies and contracts
with multi-year rating periods which began prior to the effective date of this act. In many instances
these effective date provisions require immediate attention by insurers since they directly affect
coverage now being issued or coverage presently in force.

The effective date provisions in Section 21 of Chapter 501 of the Laws of 1992 also require that
existing hospital/medical policies and contracts renewed on or after April 1, 1993 must comply
with the community rating and open enrollment provisions of the legislation.

It should also be noted that Sections 3, 5, 7, 8, 9, 10 and 15 of Chapter 501, which deal with
permissible pre-existing condition limitations and permissible conversion and continuation requirements,
become effective January 1, 1993 and apply to all policies and contracts issued, renewed, modified,
altered or amended on or after January 1, 1993.

Failure to comply with these effective date provisions will be viewed as a violation of the Insurance
Law. Such violations can result in disciplinary proceedings with the imposition of penalties
by the Insurance Department.

The Insurance Department advises prompt and intensive review of this new legislation by insurers
to assure timely compliance with all of its provisions.